ARMED SERVICES BOARD OF CONTRACT APPEALS. Appeal of -- ) ) Performance Construction, Inc. ) ASBCA No ) Under Contract No. N C-0143 )

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1 ARMED SERVICES BOARD OF CONTRACT APPEALS Appeal of -- ) ) Performance Construction, Inc. ) ASBCA No ) Under Contract No. N C-0143 ) APPEARANCE FOR THE APPELLANT: APPEARANCES FOR THE GOVERNMENT: Denver C. Snuffer, Jr. Nelson, Snuffer, Dahle & Poulsen Sandy, UT Susan Raps, Esq. Navy Chief Trial Attorney Stephen R. O Neil, Esq. Assistant Director Anthony K. Hicks, Esq. Trial Attorney OPINION BY ADMINISTRATIVE JUDGE SHACKLEFORD This appeal is from a final decision denying multiple claims under a contract for improvements to housing units at the Jackson Park Family Housing Area, Bremerton, Washington. A five-day hearing was held in Silverdale, Washington. The record for decision consists of the transcript of that hearing (tr.); the Rule 4 file submitted by the government in 12 volumes (R4, tabs 1-125); a supplemental Rule 4 file submitted by the government in 11 volumes (R4, tabs ); and appellant s supplement to the Rule 4 file in two volumes (app. supp. R4, tabs 1-38). 1 Each party filed an initial and a reply brief. While only entitlement is before us, it was understood that the number of days of delay is an element of entitlement (tr. 6). FINDINGS OF FACT General 1. On 7 April 1997, the Commanding Officer, Engineering Field Activity, Northwest, Naval Facilities Engineering Command, Poulsbo, Washington (government) 1 App. supp. R4, tabs 27-30, 36 and 37 were excluded from the record (tr. 16, 18, 1275).

2 issued Solicitation No. N R-0143, a negotiated procurement, for WHOLEHOUSE IMPROVEMENTS TO FY68 UNITS AT JACKSON PARK FAMILY HOUSING AREA, BREMERTON, WA. 2 A technical proposal and a sealed price proposal were due 7 May (R4, tab 3) 2. The work was to be performed in accordance with drawings and specifications included with the solicitation and was described in 01010, SUMMARY OF WORK, 1.1.1, Project Description, of the specifications as follows: The work includes all labor, supervision, materials and equipment required to complete the whole site improvements including demolition, clearing, asbestos removal, potentially hazardous paint work, earthwork, soil disposal, asphalt concrete, storm drainage, play equipment, site furnishings, landscaping, concrete, carpentry, insulation, asphalt shingles, doors, windows, skylights, interior finishes, painting, specialties, kitchen equipment, cabinets, window blinds, plumbing, ductwork, electrical and incidental related work. (R4, tab 3) 3. On 1 June 1998, the government awarded Contract No. N C-0143 to Performance Construction Inc. (PCI) to perform the work called for in the aforementioned solicitation in the amount of $7,166,500 plus $71,000 for bid, performance and payments bonds. In accordance with the solicitation and resulting contract, work was to begin within 15 calendar days and be completed within 690 calendar days. Thus, work was to begin on 16 June 1998 and was required to be completed by 6 May (Id.) As we find below, work actually was complete on 30 August 2001, a 481-day delay. 4. During the course of performing the work, several disputes arose between the parties. On 21 March 2001, PCI submitted a certified claim to the contracting officer seeking $421,000 for cost overruns due to electrical changes; 3 $140,000 for cabinet changes; $620,000 in direct costs and $709, for 557 days of delay for changed 2 3 Amendment No. 1 to that solicitation was also issued the same day. While the claim shows a total of $421,000 claimed for electrical changes, the components of that sum actually add up to $416,631. 2

3 work related to soils; 4 and $231,500 and 270 days of delay due to additional asbestos removal and disposal. 5 (R4, tab 112) 5. On 30 April 2001, the contracting officer advised PCI that the information provided in the claim was insufficient in several respects to issue a final decision. A corrected certification was among the additional information requested. (R4, tab 114) On 10 May 2001, PCI provided additional information including a corrected certification, which was received by the contracting officer on 29 May 2001 (R4, tab 115). By letter dated 12 October 2001, PCI filed a notice of appeal from the failure of the contracting officer to issue a final decision (deemed denial) and the appeal was docketed as ASBCA No We make further findings with respect to each claim below. Electrical 6. The contract incorporated DFARS , CONTRACT DRAWINGS, MAPS AND SPECIFICATIONS (DEC 1991) which called for the government to furnish the drawings and the specifications to the contractor and one of the contractor s obligations with regard to those drawings and specifications was as follows: (b) The Contractor shall - - (1) Check all drawings furnished immediately upon receipt; (2) Compare all drawings and verify the figures before laying out the work; (3) Promptly notify the Contracting Officer of any discrepancies; and (4) Be responsible for any errors which might have been avoided by complying with this paragraph (b). (R4, tab 3, at 15) 7. General Note 3 on drawing title sheet T-1 states: 4 5 While the claim shows a total of $620,000 in direct costs for soils, the components of that sum actually add up to $672,000. The certification failed to state that the certifier was authorized to make the certification. 3

4 ALL BUILDINGS ARE EXISTING. ALL WORK IS NEW UNLESS NOTED OR INDICATED AS EXISTING. (R4, tab 315) 8. Drawing E-1 defines the electrical symbols used on the contract drawings. The symbol for an existing receptacle is a circle with two parallel lines running from the top of the circle and extending through the bottom of the circle and with a parenthetical E beside it. (Id.) 9. Drawings E-2 through E-7 depict the demolition required and the electrical plan for each type of housing unit A through F respectively. The floor plans on drawings E-2 through E-7 all depict several locations with existing receptacles. The demolition symbols and the General Notes are similar on each of the six drawings. For example, notes five, six and seven on drawings E-2, E-4, E-5 and E-6 are as follows: 5. REMOVE EXIST. AND PROVIDE ALL DUPLEX RECEPTACLES, STANDARD AND GFI-TYPE, AND ALL LIGHT SWITCHES, 2, 3 AND 4-WAY. 6. WIRING SHALL BE NM 2/12 WITH GROUND, UNLESS NOTED OTHERWISE. 7. REFER TO PANEL SCHEDULES FOR CIRCUITS TO BE CHANGED FROM 15A TO 20A. (Id.) 10. Drawing E-8 includes a panel schedule for each of the six types of units included in the project. For Units A, B, C, D, and E, certain described circuits are followed by three asterisks (***) and the Notes to each of those panel schedules indicates that three asterisks means: REWIRE EXISTING CIRCUIT REPLACE 15A-1P BREAKER WITH 20A-1P 11. Section of the contract specifications included the ELECTRICAL GENERAL REQUIREMENTS. Paragraph 1.3, DEFINITIONS, provided in pertinent part as follows: 4

5 d. When the word REPLACE is used in the Drawings or Specifications, this means remove existing and provide new. (R4, tab 3) 12. Paragraph 1.7 of the ELECTRICAL GENERAL REQUIREMENTS states: Electrical installations shall conform to ANSI C2, NFPA 70, and requirements specified herein. (R4, tab 3) Both were incorporated into the specification in 1.1 of Section of the contract specifications covers INTERIOR WIRING SYSTEMS. Pertinent portions of that section are as follows: 2.1 MATERIALS AND EQUIPMENT Materials, equipment, and devices shall, as minimum, meet requirements of UL, where UL standards are established for those items, and requirements of NFPA Minimum Conductor Sizes Minimum size for branch circuits shall be No. 12 AWG; Wiring Methods Interior wiring shall be NM cable with integral ground wire Replace Existing 15A-1P Breakers Replace all 15A-1P circuit breakers with 20A-1P breakers. Disconnect all devices and equipment fed by 15A circuits and 5

6 remove wire back to circuit breaker. Reconnect devices and equipment previously fed by 15A wire with 20A wire. (R4, tab 3) 14. Brent Butcher (Butcher), appellant s president, prepared the bid for PCI. He testified that at the time he prepared the bid, he understood, based upon his review of the bid documents, that the government wished to rewire the existing circuits so they needed to rewire a new breaker into the panel. Butcher was of the opinion that such work would not require PCI to go in and remove the wire that was inside the walls. Therefore his bid did not include the cost of removing and replacing the wire that was inside the walls. (Tr. 110) The only bid paper in the record is a list of lump sums for various aspects of the work with the post award addition of subcontractor identification on the bid. With respect to electrical, the bid paper shows $328,000 for electrical & fixtures. (R4, tab 115; tr ) 15. Kevin Shumway (Shumway) was the PCI superintendent when the job began and had worked for PCI on other projects (tr ). The electrical issue arose before he left the company s employ (tr. 178). In a CQC meeting attended by Shumway on 19 November 1998, PCI informed the Navy of a discrepancy with respect to the electrical work and that notice was summarized by PCI in the minutes of the meeting as follows: The scope of the electrical work was improperly shown on drawings, i.e. plans show existing circuits untouched and to remain as is, but a note on the panel schedule calls for re-wiring these circuits. This was not readily evident and was not bid. This discrepancy in the drawings was only recently discovered. PCI will submit a Request for Equitable Adjustment. The major portion of the hidden work is removal of GWB [gypsum wall board] to access existing wiring. (R4, tab 25, meeting #004; tr ) 16. On 20 January 1999, Charles Baldridge (Baldridge), the PCI project manager, advised the ROICC as follows: The... drawings provide conflicting information that was not apparent until well after the job was contracted and underway. In drawing T-1, the General Notes #3 states the 6

7 following: All buildings are existing. All work is new unless noted or indicated as existing.... The floor plans shown on the referenced drawings E-2 thru E-7 indicate new work, and existing work to remain, showing which circuits are to be rewired and which are to remain as is. The work was bid with the expectation that it was fully and adequately described as shown on the floor plans, and that the General Notes are in force. These plans have notes regarding rewiring, but in those cases the rewiring is clearly indicated with bolded lines, and not called out as existing. Drawing E-8, contains the panel schedules, and hidden in these schedules are asterisks which refer to notes calling for the rewiring of circuits shown to be existing and to remain untouched. If these notes are considered to take precedence over the floor plans and general notes, they would require that the entire unit be rewired, and this is clearly not the intent of the drawings, and it was not bid that way. This conflict was brought to the ROICC s attention, and we were instructed to submit a Request for Equitable Adjustment. If the Navy wishes us to comply with the panel notes vs. the General Notes and the floor plans, we will be entitled to an equitable adjustment of $194, [Emphasis in original] (R4, tab 29) 17. Butcher testified that he reviewed and approved the foregoing letter before it was sent and the letter was provoked by being asked by the Navy to perform work beyond the scope of the contract (tr. 108). Butcher said they were being asked to replace wire where we should only be rewiring a circuit, and it s completely different one from the other, and we were being asked to put in additional wire, cut out sheetrock, and do additional work. (Tr ) 18. The Navy denied liability for the alleged additional costs taking the position that no conflict existed between the drawings, the general notes and the plan schedules with regard to which circuits were to be rewired and upgraded to 20A circuits. Using housing unit A as an example representative of units B, C, D, E and F, the Navy explained its rationale for denial of liability in part as follows: 7

8 a. Drawing E-2, for Unit type A, finds that First and Second Floor Plans show new wiring and light fixtures are to be provided in all Bedrooms. Adjacent to Bedroom 1 is a note that states Re-wire Bedroom receptacles such that only light fixtures are switched (Typ of all Bedrooms), this is further described by electrical tasks note 7 which has similar language. Furthermore, adjacent to the existing electrical receptacle at the top of the drawing in Bedroom 3, is a reference to note 6 and an indication that this reference is also typical. Note 6 states Wiring shall be 2/12 with ground unless noted otherwise., meaning that 2 new number 12 conductors and a ground wire are required. b. Both the First and Second Floor Plans for Unit A show installation of new lighting fixtures and new wiring for these fixtures throughout the housing unit. These new fixtures are identified by call outs like WF-1, SF-10, SF-11, SF-7, SF-5, ect. [sic] c. The First floor plan for Unit A shows new wiring to the new lighting fixtures, and existing receptacles in the Dining/Living Room (see upper left corner of Dining Room), as well as addition of a new receptacle adjacent to Panel A. This drawing also shows extensive modifications to the electrical circuits in the kitchen area, including new wiring for the Dishwasher, Disposal, Range, and Hood. d. General Note 7 on E-2 states Refer to panel schedules for circuits to be changed from 15A to 20A. The Panel Schedule for Unit type A, on drawing E-8, includes three (3) asterisks in the Circuit Description for the Upstairs Bedrooms, Dining Room, Living Room, Lights, Disposal and Hood. The notes at the bottom of the Panel Schedule indicate that the three (3) asterisks indicate that the Contractor is to Rewire existing circuits replace 15A-1P breaker with 20A-1P. (R4, tab 38) 19. The Government invited PCI to request a contracting officer s final decision if they disagreed with the determination that no conflict existed (id.). Appellant received 8

9 the government s letter on or about 26 March 1999 and Butcher testified that he understood it to be a direction to put in new wire (tr. 111). 20. Butcher estimated that PCI would need about 50,000 linear feet (LF) of wire in its bid (tr ). On direct Butcher explained how he came up with the amount of electrical wiring that would have to be installed: The first step that was probably taken as I recall is the plans were given out to a couple of supply houses to get an estimate on fixtures and boxes and wire, and you know, miscellaneous devices. And I believe at some point in time I ran a wheel and did the multiplications of the different type of units to come up with an approximate amount of wire..... [A wheel is] an estimating wheel. It s a little too[l] about 6 inches long. It has a wheel on it, and it has a little digital readout with some settings, and you can set for the type of plan that you have, the scale, and then run the wheel and it will tell you how many feet. (Tr ) 21. PCI ultimately installed approximately 133,500 LF of wire or about 83,500 LF of wire in excess of the amount estimated in its bid (R4, tab 101; tr ). An estimate for #12 NM cable included in the design basis for the project prepared by the government s consultant (A-E), totaled 41,100 LF (R4, tab 2). At least some of the existing cable in the walls, which was removed, was 12-gauge, suitable for 20-amp and the new cable installed was also 12-gauge (tr ). On cross-examination, Butcher agreed that no one explicitly directed them to replace old 12-gauge wire with new 12-guage wire (tr. 419). 22. Baldridge testified that the electrical code requires 14-gauge wire with a 15-amp circuit and 12-gauge wire with a 20-amp circuit (tr ). 23. On 26 October 1998, PCI submitted Request for Information (RFI) No. 21 primarily concerning the condition of the drywall and its asbestos content. However, in the context of the RFI, PCI stated: 9

10 At present, removal of the existing drywall to accomplish electrical work[] is being done by the asbestos abatement contractor. (R4, tab 18) This work occurred prior to PCI raising the issue of the extra wiring. 24. According to Shumway, the problem was that the Government hid the requirement to replace existing wire in the panel schedule rather than on the drawings and thus, when they discovered the requirement it was a new thing (tr. 274). 25. Butcher testified that the take-off for materials and fixtures related to the electrical was probably done by a wholesale house, not by him (tr. 404). Butcher does not have a specific recollection he looked at the general notes on sheet E-2 of the drawings when he did his pre-bid estimate. 26. In his deposition Butcher testified that when he first looked at the original electrical drawings, he did not think they had conflicting information and the conflicting information did not become apparent until after the job was awarded and was underway. He agreed that if he had looked at the drawings longer, harder and more carefully, as he later did, the conflicting information could perhaps have been apparent prior to the time of bid. (Tr ) When he realized, after award, that there was conflicting information, it was clearly ambiguous in his mind (tr. 410). Decision Electrical Appellant takes the position in its amended complaint and in its initial brief that electrical drawings E-2 to E-7 show floor plans and work to be performed; that the same drawings depict the demolition work to be performed; that the sheets show clearly and unambiguously that there are numerous electrical receptacles which are to remain and concludes that since the Navy took the trouble to depict the receptacles which were to remain, appellant reasonably concluded they should remain, otherwise the depiction was wasted. 6 (Am. compl. at 1-2 of 10; app. br. at 4-5) In its brief, appellant further argues: As part of the electrical work, the remodel required some of the existing 15A circuitry to be converted to 20A circuitry. Performance interpreted the drawings to require that the receptacles and circuit breakers were to be replaced so as to accommodate that requirement. When Performance proceeded with the work in accordance with their 6 Appellant s brief uses the word circuits rather than receptacles. 10

11 understanding of the drawings, the Navy objected and required the removal of all wiring and replacement with a whole new wire, circuit breakers and new receptacles. This aggressive and unwarranted demand by the Navy contradicted the information contained in the bid documents and contract drawings on Sheets E-2 through E-7. The Navy insisted that the requirement to redo all the electrical work was required by a set of asterisks on Sheet E-8. Sheet E-8, however, should not require that information depicted with great care and consistency on Sheets E-2 through E-7 be ignored. Yet the interpretation of the Navy does just that. The only proper way to interpret the asterisks on Sheet E-8 is to read them in light of the extensive details shown on the other sheets of the electrical plans. That is, the meaning of the asterisks is that where a circuit breaker is shown to be replaced, then the replacement should involve a 20 amp circuit breaker replacing the existing 15 amp circuit breaker. However, this does not require the bidder or the contractor to determine that he is to replace all wiring in the circuit, along with the circuit breakers. Such an overreaching interpretation would have the effect of ignoring information provided at great effort by the Navy in the bid documents. (App. br. at 5-6) Appellant argues that the electrical specifications were defective in that the plans made clear the existing circuits that were to remain, but were made unclear by the Navy s interpretation of the panel schedule (app. br. at 31). Inconsistently, appellant also argues that the contract provisions relating to the electrical requirements are clear and unambiguous, but if the Board finds otherwise, then the ambiguity is not patently so (id. at 35). Using these alternative theories appellant seeks to recover the costs of rewiring in the walls including dry wall and drywall abatement work, along with the circuit breakers in the housing units which were to be renovated. The government denies liability for those costs. The inquiry into the meaning of the contract begins with the proposition that an interpretation which gives a reasonable meaning to all parts of an instrument is preferred to one which leaves a portion of it useless, inexplicable, inoperative, void, insignificant, meaningless or superfluous. Moreover, no provision should be construed as being in 11

12 conflict with another one unless no other reasonable interpretation is possible. Hol-Gar Manufacturing Corp. v. United States, 351 F.2d 972, 979 (Ct. Cl. 1965); Centex Construction Co., ASBCA No , 02-1 BCA 31,719. An ambiguous contract is susceptible to more than one reasonable interpretation. Sun Shipbuilding & Dry Dock Co. v. United States, 393 F.2d 807, 815 (Ct. Cl. 1968). To recover for a patent ambiguity the contractor must seek clarification prior to submitting its bid. Froeschle Sons, Inc. v. United States, 891 F.2d 270, 273 (Fed. Cir. 1989). Moreover, a patent ambiguity must be blatant and significant rather than sudden, hidden or minor. S.O.G. of Arkansas v. United States, 546 F.2d 367, 370 (Ct. Cl. 1976). If an ambiguity is latent, the contractor must prove that it relied on its present interpretation during bid preparation. Fruin-Colnon Corp. v. United States, 912 F.2d 1426, 1430, 1432 (Fed. Cir. 1990). We analyze the requirements with respect to Unit type A, which is typical in terms of its requirements, with Unit types B, C, D, E and F. On sheet E-2, both the first and second floor plans for Unit type A show several existing receptacles. Appellant says this means that not only were the receptacles to remain, but so was the wiring forming a part of the circuit for the receptacles. Such conclusion is not self-evident on a review of the drawing. Moreover, appellant s interpretation ignores the notes on E-2 which unequivocally state that existing receptacles are to be removed and instead the contractor is to provide all duplex receptacles. The notes give two additional relevant pieces of information. They describe the type of wiring to be provided and they refer the reader to the panel schedule for circuits to be changed from 15A to 20A. The panel schedule for Unit type A lists the various circuits on that panel and three asterisks follow several of the entries. The notes to panel schedule A tell the bidder that three asterisks mean rewire existing circuit and replace 15A-1P breaker with 20A-1P breaker. As the specifications make clear, all devices and equipment fed by 15-amp circuits were to be disconnected and its wiring removed back to the circuit breaker. As to the reconnected devices and equipment, the specifications require that they be fed by 20-amp wire. Appellant s interpretation requires a disregard of clear provisions requiring replacement of existing wire and, as such, is unreasonable. Consequently, the contract is susceptible to only one reasonable interpretation, i.e., that the contract required replacement of existing wire to accommodate the change from wire for 15-amp breakers to wire for 20-amp breakers. To the extent appellant replaced 12-guage wire with 12-guage wire, it did so without direction from the government and may not recover for that voluntary work. Furthermore, Butcher s testimony concerning appellant s bid is not persuasive. On the one hand, he testified based upon his review of the bid documents, the government only wanted him to rewire a new breaker into the panel, not remove the wire 12

13 inside the walls. This view clearly ignores provisions requiring the replacement of wire suitable for 15-amp breakers with wire suitable for 20-amp breakers. On the other hand, Butcher testified in his deposition that had he looked at the drawings longer and harder and more carefully the alleged conflicting information could have been apparent before submitting his bid. Moreover, Butcher did not do the take-off for materials and fixtures which was done by a wholesale house and he has no recollection that he ever looked at the notes on sheets E-2 through E-7 when he estimated the costs for his bid. Butcher does not even recall looking at the panel schedules when bidding the job and it was unreasonable not to do so. We are not clear on the demarcation between what Butcher estimated and what the wholesaler estimated. Thus we lack such confidence in appellant s electrical bid as would allow us to find that PCI relied on the current interpretation of wiring requirements at the time of bid. The claim is denied. Asbestos 27. Section of the specifications, ENGINEERING CONTROL OF ASBESTOS CONTAINING MATERIALS, covered the manner in which materials containing asbestos should be handled during work on the project. Paragraph of that section provides: The work covered by this section includes the handling of asbestos containing materials which are encountered during repair, and construction projects and describes some of the resultant procedures and equipment required to protect workers and occupants of building or area, or both, from contact with airborne asbestos fibers. [T]he work also includes the disposal of the generated asbestos containing materials. More specific operational procedures will be outlined in the Asbestos Hazard Abatement Plan called for elsewhere in this specification. The asbestos work includes the removal of VAT, mastic, sheet vinyl (and backing and mastic), kitchen sinks, stove heat shields and foil/paper insulation at light fixtures. Provide full containment and glovebag techniques as outlined in this specification. (R4, tab 3) 28. Paragraph , Asbestos Hazard Abatement Plan, provided in part as follows: 13

14 Submit a detailed plan of the safety precautions... and work procedures to be used in the removal of materials containing asbestos. The plan shall be prepared, signed, and sealed by the PQP.... The Asbestos Hazard Abatement Plan must be approved in writing prior to starting any asbestos work. The Contractor, Asbestos Hazard Control Supervisor, and PQP shall meet with the Contracting Officer prior to beginning work, to discuss in detail the asbestos hazard abatement plan, including work procedures and safety precautions. Once approved by the Contracting Officer, the plan will be enforced as if an addition to the specification.[ 7 ] (R4, tab 3) 29. In 1993, prior to issuing the solicitation, the government initiated an asbestos survey and that survey was furnished to PCI on 12 November 1998, after award of the contract. Included in that survey was a section entitled Miscellaneous, which provided as follows: Gypsum wall board mud was found to contain asbestos. However, L&I [State of Washington Department of Labor and Industry] considers this as part of the wall board itself and does not usually require special removal precautions. Care should be exercised anyway to not disturb larger or excessive areas of wall board mud. (R4, tab 192; tr. 1004) 30. Drawings A-13 to A-18 set forth the demolition plans for each floor of each unit type. Several plans (for example, A-13, A-16) required the removal of gypsum wall board (GWB). Drawings A-13 to A-17, however, included identical ASBESTOS DEMOLITION NOTES that provided in pertinent part as follows: A. PROVIDE ASBESTOS CONTROL MEASURES FOR REMOVAL AND DISPOSAL OF ITEMS INDICATED AS CONTAINING ASBESTOS. B. ASBESTOS CONTAINING MATERIALS: 7 A PQP or Private Qualified Person was to be hired by the contractor to perform certain specified tasks with respect to asbestos abatement. (R4, tab at 5) 14

15 1. ALL EXST VAT & MASTIC BELOW VAT CONTAIN ASBESTOS 2. ALL EXST VAT IS NON-FRIABLE 3. FOIL/PAPER MISC LIGHT FIXTURES CONTAINS ASBESTOS. REFER TO ELECTRICAL PLANS FOR LOCATIONS OF FIXTURES CONTAINING ASBESTOS & REQUIRING REMOVAL. 4. EXST KITCHEN SINK COATING CONTAINS ASBESTOS & REQUIRES REMOVAL. 5. EXST GWB MUD CONTAINS ASBESTOS. DO NOT DISTURB MORE AREAS THAN REQUIRED 6. EXST HEAT SHIELD UNDER CABINET AT STOVE CONTAINS ASBESTOS (R4, tab 315) 31. Drawing A-18 included all six of the listed materials plus an additional note: ALL BACKING & MASTIC ON EXST SHEET VINYL CONTAIN ASBESTOS. (Id.) 32. The estimate included in the design submission by the A-E for Asbestos Abatement and Disposal under 02081, included line items for removal of VFT and underlayment or mastic, kitchen sinks, heat shields and incandescent fixtures. It did not include an amount for gypsum wall board mud (R4, tab 2 at 6 of 26). 33. A Mutual Understanding Meeting was held on 23 October 1998 between government and contractor personnel. John Wade (Wade), appellant s CQC Manager prepared the minutes of that meeting. With respect to drywall in the existing units, Wade wrote: Drywall mud contains asbestos. The contract instructs the KTR to disturb that material as little as possible. Where new work is required, the existing drywall must be demo d by an asbestos abatement contractor and repaired in such a manner that no dust is created. 15

16 (R4, tab 22) 34. Shortly after issuance of the solicitation and prior to award of the contract, on 29 April 1997, PCI was provided a lump sum quote for certain of the work called for in the solicitation by a firm called F.S. & GS. Services, Inc. (FS&GS). The bid was submitted by Gordon Williams (Williams), president. With respect to asbestos, the quote included asbestos removal and removal of sheet rock in kitchen and baths. Excluded from the bid was spot removal of sheet rock and, if required, a unit price was included. (R4, tabs ) 35. On or about 10 September 1998 PCI and FS&GS finalized a subcontract agreement for performance of asbestos abatement work called for in as part of a firm fixed price and additional sheetrock work at a unit price (R4, tab 156). FS&GS prepared the asbestos abatement plan, submitted it to PCI, and PCI in turn submitted it to the government for approval on 17 August 1998 (R4, tab 158; tr. 524, 528). 36. The government approved the plan with comments and returned it on 16 September PCI forwarded same to FS&GS a couple of days later (tr. 529). FS&GS resubmitted the plan on 2 October 1998 (R4, tab 318; tr ). The resubmitted plan was consistent with the way Williams bid the job and the work was performed consistent with the work plan (tr. 1000). 37. In preparing a bid to PCI, Williams reviewed the specifications and drawings and concluded that the sheetrock contained asbestos that had to be removed under abatement conditions from the kitchens and baths as identified in the contract. He recognized also that there was a requirement for possible spot removal in other areas as well. (Tr ) 38. PCI s asbestos abatement plan affirmatively stated that the asbestos work included the removal of bathroom and kitchen sheet rock as asbestos containing material. Moreover, the plan, prepared by FS&GS, affirmed the contractor s understanding that all textured sheet rock walls do contain asbestos and will be handled with coordination of the general contractor on a unit cost basis (R4, tab 158 at 129). 39. Butcher knew that an asbestos abatement plan was submitted under the subject contract, yet in preparing his asbestos claim, he did not review that plan, nor was he aware of anyone else taking that plan into consideration prior to submission of the asbestos-related claim (tr ). 16

17 Decision Asbestos Abatement In its amended complaint, PCI sought $132,488 for gypsum wall board removal under abatement conditions (am. compl. at 9). The amount was increased to $181,906 on 28 February Appellant alleges the government withheld superior knowledge pertaining to the abatement of asbestos when it failed to disclose a paragraph from a 1993 study commissioned by the government and that such failure to disclose caused cost overruns. We find the contention to be without merit. We set forth appellant s burden of proof with respect to the superior knowledge doctrine, as follows: As the superior knowledge doctrine is generally formulated, the contractor bears the burden of proving that (1) it undertook to perform the contract without vital knowledge of a fact that affects performance costs or direction, (2) the Government was aware the contractor had no knowledge of and had no reason to obtain the information, (3) any contract specification supplied misled the contractor, or did not put it on notice to inquire, and (4) the Government failed to provide the relevant information. Johnson Controls World Services, Inc., ASBCA Nos , 47885, ,458 at 142,140. The information said to be withheld bears repeating: Gypsum wall board mud was found to contain asbestos. However, L&I [State of Washington Department of Labor and Industry] considers this as part of the wall board itself and does not usually require special removal precautions. Care should be exercised anyway to not disturb larger or excessive areas of wall board mud. (R4, tab 192) The first and third sentences were essentially included in the contract and thus the contractor was on notice that gypsum wall board mud contained asbestos and it was on notice that it should be careful not to disturb more areas than required. The second sentence was not included and thus is the only provision against which we evaluate the superior knowledge doctrine. As to the first element of proof, appellant has not shown that knowledge of an opinion of a department of the State of Washington was vital information that affected performance costs or direction. 17

18 Appellant states repeatedly in its reply brief that vital information was withheld without demonstrating that the information was vital. The following statement is the closest appellant comes to demonstrating the information was vital: In the present case, the Navy withheld valuable information regarding the asbestos containing drywall. The preparation of the bid for the abatement was done exclusively by Mr. Butcher of Performance Construction. See response to Respondent s paragraph 4 above, (see also transcript p ). Mr. Butcher testified that he relied solely on his own experience, and not on the knowledge or information of FS&GS when preparing his bid. Id. He read the clear disclosures of the contract, which failed to include sheetrock or drywall in the items requiring abatement for removal. Performance relied on the contract s clear terms which excluded drywall from abatement and planned accordingly. (App. reply br. at 76) The contention that PCI relied on the contract s clear terms which excluded drywall from abatement is not accurate. The clear terms of the contract did not exclude drywall from abatement. The drawing notes advised that the drywall contained asbestos and that control measures applied thereto. The notes merely cautioned that the drywall should not be disturbed more than required. As to the second element of proof necessary, there has been no showing that the government was aware the contractor had no knowledge of the opinion of the Department of Labor and Industry of the State of Washington. Appellant s ultimate subcontractor was certainly aware of it. Moreover, we cannot discern how knowledge of that sentence could have changed appellant s approach to bidding the job. Further, there is no evidence that any provision included in the contract misled appellant or did not put it on notice to inquire with regard to the opinion of the Department of Labor and Industry of the State of Washington. Accordingly, the claim for additional asbestos abatement costs, including claims for delay and impact costs, is denied. Cabinets 40. Section of the contract specifications covered RESIDENTIAL KITCHEN AND VANITY CABINETS. Cabinets were generally described in 2.1 of 12391, in part as follows: 18

19 The work includes providing new factory-finished kitchen wall and base cabinets with high pressure decorative laminate (HPDL) countertops, bathroom vanity cabinets with HPDL countertops, and electrical panel cabinet door cover. The cabinets shall be manufacturer s standard or custom fabricated product which conforms to ANSI/KCMA A161.1, the requirements specified herein, and bear the KCMA Certified Cabinet seal of the Kitchen Cabinet Manufacturers Association. In lieu the KCMA seal, manufacturer shall submit test reports from an approval laboratory that cabinets meet requirements of ANSI/KCMA A (R4, tab 3) 41. Other pertinent portions of the cabinet specifications follow: Hardwood All exposed surfaces shall be oak consistent with the specified finish Particleboard ANSI A208.1, Grade 1-M-2 or 2-M-2 or better. Particleboard may be used in lieu of plywood if both faces and all exposed edges are covered with wood veneer or HPDL, except drawer sides and back shall be plywood FABRICATION Cabinets Kitchen wall and base cabinets and vanities shall be same type of construction and appearance.... Ends, bottoms, tops, and partitions shall be hardwood plywood or particleboard not less than ½-inch thick.... Finish all exposed edges of 19

20 plywood and particleboard with hardwood strips or high-pressure decorative laminate FINISHES Cabinet Finishes Provide factory applied stained wood finish on all external surfaces except underside of drawer bottoms. External surfaces shall be hardwood with no exposed materials except hardwood. Set and fill exposed staple or nails to match cabinet finish. Internal surfaces shall be provided with HPDL (plastic laminate) finish. (Id.) 42. In 1.1 of 12391, the KITCHEN CABINET MANUFACTURING ASSOCIATION (KCMA) standard, ANSI/KCMA A161.1, 1990 Kitchen and Vanity Cabinets, was incorporated by reference into the contract. (R4, tab 3). Said standard, entitled Recommended Performance & Construction Standards for Kitchen and Vanity Cabinets, provides in pertinent part as follows: 8.0 FINISH SPECIFICATIONS 8.1 General. These tests create, in accelerated form, the cumulative effects of years of normal kitchen conditions on prefinished cabinets. Except where otherwise specified, a cabinet door shall be used for evaluation in the finishing tests. However, it is implicit that all exterior exposed surfaces (any part of the surface that can be seen in normal usage after installation) shall have the ability to pass the same tests. Exceptions: (1) Sides do not have to be finished on individual units, but exposed sides have to be factory finished or covered with factory-finished panels in the field. (2) Toe rails do not have to be finished, but have to be covered or finished in the field. (3) Undersides of wall-cabinet bottoms are considered to be interior exposed surfaces. 20

21 (R4, tab 36) 43. On or about 3 August 1998, PCI s cabinet supplier, Terry M. Steele CABINETS & COUNTERTOPS (Steele), submitted a quote for furnishing cabinets and therein stated that the cabinet construction was per specification and that EXPOSED ENDS [would be] FACTORY FINISHED. (R4, tab 148) 44. On 10 August 1998, Steele presented its submittal package to PCI for (tr. 929). Steele stated: THE FOLLOWING KEY ITEMS ARE PRESENTED AS VARIANCES BUT ARE THE MANUFACTURES [SIC] STANDARD PRODUCT AND SHOULD BE CONSIDERED EQUAL[.] 1. CABINET CONSTRUCTION TO BE A COMBINATION OF INDUSTRIAL GRADE PARTICLE BOARD AND MEDIUM DENSITY FIBERBOARD (MDF) WITH WHITE VINYL OVERLAY INTERIOR EXCEPT FOR THE BOTTOM OF ALL SINK CABINETS WHICH WILL BE HIGH PRESSURE LAMINATE TO MATCH THE COUNTERTOPS.[] [Emphasis in original] (R4, tab 151) Steele explained that the variance in this case was offering something not exactly called for by the specification, but constituting a better product (tr. 930). With respect to cabinet ends, Steele stated: ½ INDUSTRIAL GRADE PARTICLE BOARD OR MDF WITH WHITE VINYL OVERLAY INTERIOR. EXPOSED ENDS ARE 3/4 WITH OAK VENEER TO MATCH THE FACE. SEMI-EXPOSED SIDES NEXT TO THE RANGE ARE WHITE VINYL. With respect to cabinet tops and bottoms, Steele stated: ½ INDUSTRIAL GRADE PARTICLE BOARD WITH WHITE VINYL OVERLAY 2 SIDES ON WALL 21

22 CABINETS, 1 SIDE ON BASE EXCEPT FOR SINK CABINETS WHICH HAVE HPDL TO MATCH THE COUNTERTOP. TOP AND BOTTOM ARE DADOED INTO THE SIDES (R4, tab 151) 45. On 12 September 1998, Wade advised Steele that the submittal was disapproved because the variance was not acceptable to the government and asked him to resubmit with all cabinet work complying with the specification (R4, tab 173; tr ). 46. On 15 September 1998, PCI submitted for approval its first cabinet submittal under specification (Submittal No. 063). Said submittal included Steele s 10 August 1998 submittal to PCI. Certain variances from the specification were sought with a corresponding credit proposed. The government disapproved the submittal. (R4, tab 20) 47. On 13 November 1998, PCI submitted its second cabinet submittal for approval. This submittal included some of the same information as had been included in Steele s 10 August submission to PCI and in the 15 September submission by PCI to the government, including the language with respect to cabinet ends: EXPOSED ENDS ARE ¾ WITH OAK VENEER TO MATCH THE FACE. SEMI-EXPOSED SIDES NEXT TO THE RANGE ARE WHITE VINYL. On 10 December 1998, this submittal was also disapproved with the comment that the contractor should, [p]rovide hardwood surfaces per para 2.4.1, vs white vinyl at semi-exposed sides. (R4, tab 27) 48. Terry Steele testified that the term semi-exposed sides is an industry term (tr. 932), but agreed that those words were not used in the specification, which in refers to internal and external surfaces (tr. 933). 49. PCI made a third cabinet submittal on 30 December With respect to cabinet ends this submittal stated: ½ INDUSTRIAL GRADE PARTICLE BOARD OR MDF WITH WHITE CL20 BOTH SIDES. EXPOSED ENDS HAVE AN OAK VENEER FIELD INSTALLED. SEMI EXPOSED AREAS NEXT TO THE RANGE AND DISHWASHER WILL HAVE THE EASY CLEAN CL20. 22

23 (R4, tab 30) On 1 February 1999, this submittal was also disapproved (id.). CL20 is a type of HPDL. 50. A fourth submission on 8 February 1999 was approved on 23 February 1999 subject to the following CORRECTIONS NOTED: 1. PROVIDE HPDL FINISH FOR ALL INTERNAL SURFACES OF DRAWER BOX, PER PARA CABINETS SHALL CONFORM TO ANSI/KCMA A161.1 (R4, tab 32) Terry Steele agrees that none of the comments by the ROICC in this document refer to semi-exposed ends next to the range and dishwasher (tr. 943). 51. Wade s job diary for 8 March 1999 records the following: [T]el con Don Truscott: underside needs to be wood. [I]ts an exposed surface. (Who interprets?) (R4, tab 271 at 88-89) Truscott was the government s project manager/architect. Considering the many submissions and reviews for the cabinets we find this note of a telephone call to be unpersuasive evidence of a direction by the government for the installation of wood on the underside of cabinets. Neither Wade nor Truscott testified so we have no explanation of what prompted the call. 52. On 8 April 1999, Steele complained to PCI that the government specification was out of sync with industry standards and that he provided the same product on the FY70 project that had the same specification as the FY68 project (project in question) and it was accepted by the same A-E and same ROICC. (R4, tab 44) 53. On 24 May 1999, Steele wrote to PCI and asked them to review an enclosed specification for the project. Steele further stated that it would honor its original estimate and the EXPOSED END SKINS AND UNDER WALL PANELS WILL BE SHIPPED LOOSE FOR FIELD INSTALLATION. (R4, tab 220) With respect to ends, the specification which was enclosed, stated: ½ industrial grade particle board with white CL20 both sides except for the exposed ends which have CL20 one side and a 1/8 oak veneer plywood skin field installed. The semi 23

24 exposed areas next to the range and dishwasher will have the easy clean CL20. The specification further provided: Wall cabinet ends are recessed from the bottom of the face frame to provide clearance for special 1/8 oak veneer plywood under wall panel to be field installed. (R4, tab 221) 54. On 10 October 2000, counsel for Performance submitted a claim to the contracting officer. With respect to cabinets, the claim was based upon the government s alleged refusal to accept cabinets, not strictly meeting the specifications, which had been accepted under a similar specification in another contract. There was nothing in that claim about the government requiring PCI to install oak veneer on the wall cabinet bottoms or end panels next to ranges and refrigerators. (R4, tab 94) 55. On 18 January 2001, counsel for PCI wrote to his client regarding a meeting recently held with the Navy. With regard to cabinets, counsel recounted that the Navy was awaiting a newly submitted claim package that would explain: What the specific complaints for the cabinet change is/are. For example, is the problem with the doors, the laminate used instead of the pressed wood, or is it the bottom covers on the upper cabinets. This needs to be reconciled with the earlier letter from the supplier. (R4, tab 254) 56. On 21 March 2001, PCI submitted to the contracting officer what was intended as a complete statement of claims, resubmitted as a result of discussions with the Navy. With respect to cabinets, the claim made no specific statement concerning a requirement for oak veneer on wall cabinet bottoms and end panels next to ranges and refrigerators. (Finding 4; R4, tab 112) 57. On 28 February 2003, appellant amended its claim and the amount included for cabinet changes was $25,489 (R4, tab 317). This amount was lowered from $140,000 (tr. 381). Counsel for PCI confirmed at trial that PCI is no longer claiming the doors, the 24

25 hardware, the boxes, or the construction of the drawers and is now claiming only the wood on the end next to the stove and refrigerator and under the wall cabinet (tr. 697). 58. Steele supplied the cabinets and countertops for the job as a vendor to PCI, providing material only, and not labor. He interfaced with and took direction from John Wade and Charlie Baldridge. (Tr. 928) 59. According to Steele, Semi-exposed with respect to cabinets is an industry term that describes an area next to a range or behind a door that is only exposed when the door is opened (tr. 934) while an exposed surface is one that you will see at all times (tr. 935). Decision Cabinets In its amended complaint, appellant claimed about $140,000 due to an alleged change in the cabinet requirements. The allegation is that the government used the same cabinet specification under a prior contract, and for the instant contract the government rejected that cabinet and required a more expensive one. At trial appellant changed the amount of its claim to $25,489 and changed the theory of recovery, stating that the contract required the installation of HPDL (high pressure decorative laminate) under the wall cabinet bottoms and at end panels next to the ranges and refrigerators, but that the government insisted on the installation of finished wood (oak veneers) at these locations which had to be field installed. Paragraph of the cabinet specification called for hardwood on external surfaces of the cabinets. The ANSI/KCMA standard for cabinets, which was incorporated into the contract, defined the undersides of wall-cabinet bottoms to be considered interior exposed surfaces. The term semi-exposed is not used in the standard or in the specification. Thus the contract required hardwood on the sides next to ranges and refrigerators but not on the undersides of the cabinets. There is no credible evidence the government directed the installation of wood on the underside of cabinets. Therefore the cabinet claim is denied. Soil and Earthwork 60. Jackson Park is approximately a 15-acre site, sitting mainly on a hillside. It had rock walls in front of some of the buildings to stabilize the hills and is fairly wooded for a residential area. It has lots of tall evergreens and some of the spaces in which work was to be performed were tight. (Tr , ) The contract divided the work areas into site one through site seven and contained a soil disposal area at a place called Elwood Point, which was east of the work areas (R4, tab 315 at drawings T-1, T-2). 25

26 61. Section 01010, 1.4.1, Order of Release of Work Areas, of the specification as modified by Solicitation/Amendment No. 1 to the solicitation provided as follows: Work areas will be release [sic] for work in the following order. Sites are indicated on Sheet T-2 of the drawings. a. Initial Release: The following work areas will be released at the start of construction: Site 2 Site 4 Site 5 Site 6 Soil Disposal area and access route b. Subsequent work areas will be released in the following order: Site 3 Site 1 Site 7. (R4, tab 3) Paragraph of 01010, Limitations on Release of Work Areas, of the specification as amended by Solicitation/Amendment No. 1 stated that in order to allow residents to move into completed units, Site 3 would not be released for work until 45 days after acceptance of Site 2; Site 1 would not be released until 45 days after acceptance of Site 5; and Site 7 would not be released until 45 days after acceptance of Site 4 (id.). 62. Paragraph 1.9, Disposition of Surplus Soil Material and Sod, of of the specification as amended by Solicitation/Amendment No. 1 stated: a. Approximately 7,500 cubic yards of surplus material shall be removed from Government Property. This material shall be tested to the minimum test requirements specified herein prior to being removed from Government Property. For purposes of bidding, assume this soil will not need to be disposed of as hazardous waste. b. All remaining surplus material shall be assumed sufficiently clean to be re-used on Government Property 26